IMF Chief Warns Trade Tensions Risk Global Recession/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ IMF chief urges nations to resolve trade disputes quickly. Trump’s shifting tariffs cause business delays and global unease. Forecasts now show higher U.S. recession risk amid market turmoil.
IMF Urges Swift Resolution to Trade Disputes Amid Recession Fears — Quick Looks
- Georgieva’s Warning: IMF head says trade uncertainty stifles investment and spending.
- Rising Recession Risk: U.S. economic forecast downgraded; 40% chance of recession.
- Global Impact: Poor countries most at risk from ongoing trade conflict.
- Trump’s Tariffs: 145% on China, 10% globally — highest U.S. levels in a century.
- Policy Instability: Trump’s abrupt tariff changes leave businesses confused.
- Market Reaction: Stocks bounce as U.S. signals possible tariff reduction.
IMF Chief Warns of Trade War Fallout, Calls for Urgent Global Action
Deep Looks
WASHINGTON (April 24, 2025) — Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), issued a stern call Thursday for global leaders to resolve trade tensions quickly, warning that escalating disputes — particularly those driven by U.S. tariff policy — are weighing heavily on global economic growth.
“Uncertainty is bad for business,” Georgieva told reporters during a press briefing at the IMF and World Bank’s spring meetings. “We need swift, coordinated action to restore confidence and unlock global investment.”
Her remarks came just days after the IMF downgraded its global growth outlook, citing mounting trade friction. Notably, the Fund raised its forecast of a U.S. recession within the next year from 25% to 40%, reflecting concern over President Donald Trump’s aggressive tariff policies and their ripple effects worldwide.
Trump Tariffs Create Global Disruption
Since returning to office in January, Trump has reimposed and expanded tariffs on a sweeping scale, including:
- 145% tariffs on Chinese imports
- 10% tariffs on nearly all global trade partners
These measures mark a dramatic departure from decades of U.S. free trade policy. But Trump has frequently altered or paused tariff rules without warning, creating what Georgieva described as a “climate of confusion” for both investors and consumers.
“It’s impossible to plan long-term operations when policy direction changes weekly,” said Georgieva. “This creates hesitation across sectors.”
The IMF warned that low-income nations, already vulnerable to external shocks, could suffer most from a prolonged period of trade instability. Unlike wealthier countries, many lack fiscal resources to buffer against the downturn.
Markets Shake, Then Rally on Hope of Deal
The economic volatility triggered by the tariffs has sent shockwaves through global markets. U.S. stock indices saw weeks of losses as businesses slashed forecasts and investment froze. However, a Wednesday rally gave investors a glimmer of hope after the Trump administration signaled potential reductions in tariffs on Chinese goods.
“There is an opportunity for a big deal here,” said U.S. Treasury Secretary Scott Bessent at the Institute of International Finance. His comments sparked optimism that some form of compromise might soon be reached.
Despite those remarks, China on Thursday denied any ongoing negotiations, calling reports of progress “as groundless as trying to catch the wind.”
Still, businesses are watching closely. Many U.S. firms have delayed expansion plans and cut hiring due to trade policy instability. Economists warn that unless a clearer direction emerges soon, consumer confidence and job growth could falter in the second half of the year.
A Global Call for Stability
Georgieva emphasized that restoring global economic confidence will require “mutual respect and coordinated dialogue” — a pointed reference to Trump’s go-it-alone approach.
“The time to act is now,” she said. “Without decisive cooperation, we risk compounding the damage to the global economy.”
The spring meetings continue through the weekend as finance ministers and central bank governors from over 190 nations gather to tackle pressing global issues — with trade conflict and inflation topping the agenda.
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